Waiting for an Offer on your Home for Sellers

Because first impressions are so important, it is essential that your home is in “show-ready” condition for each and every showing. Although it can be daunting at first, if you use this quick and easy checklist, you will have your home sparkling in no time. To make it even easier, get your family involved. Assign some of these tasks to other family members to do each morning so that you are prepared for any last minute showing.
Here is your checklist to run through before every showing:

✓ Open drapes, shades, blinds

✓ Turn on lights to make your home look bright and cheerful.

✓ Pick up shoes, toys and any other items that might be scattered around.

✓ Put any dirty dishes in the dishwasher and close it.

✓ Empty all trash.

✓ Wipe down all counter tops and tables.

✓ Make all beds.

✓ Run the vacuum.

✓ Put away all clothes.

✓ Make sure all dirty clothes are out of sight.

✓ Make sure rooms smell good, spray a deodorizer if necessary.

✓ Make sure any medications are out of sight.

✓ Turn oven on to 250 degrees. Put a small amount of vanilla extract on a piece of foil into the oven. This will simulate the smell of fresh baked chocolate chip cookies. Yummy!

✓ Turn off all televisions. You can play soft music at a low volume in the background only.

✓ Make sure all papers, mail, bills and other confidential materials are out of sight.

✓ Secure any jewelry, cash or other valuables.

✓ Adjust the temperature; make sure your home is warm in the winter and cool in the summer.

Perhaps driven by sheer desperation, say, a house that’s been on the market for months and just won’t sell, or a home that’s in less-than-optimal condition, real estate agents and homeowners alike have been known to take some drastic measures.

Take, for example, the legend of St. Joseph. Over the years, St. Joseph has become the patron saint of real estate. Have a home that won’t sell? Simply head online, purchase a St. Joseph statue –they’re available for $9.95 –and wait for it to arrive in the mail. Once it shows up, you simply bury it in the yard, or, in a pot, if you’re in a condo or don’t have a yard, and wait for the statue to do its work. Some say that the statue can help a home to sell much faster than it would otherwise. Others insist that it can even help to ensure a competitive price, no matter what the current state of the housing market.

Once the home is sold, proponents say that the statue should be unburied, and given a place of honor in the new home.

While opinions vary widely on the effectiveness of this approach, it’s worth noting that, as is the case with many things, it seems to work best for those who are already convinced of the statue’s effectiveness.

When Murphey’s father got a new job in Michigan and the family relocated, they buried a statue of Joseph at their home. Eight years later, though, the house has plunged in value but still hasn’t sold.

“My mom says, ‘St. Joseph doesn’t like us,’” Murphy recounts, “I personally think it’s because it’s a piece of plastic, and it is the home market system crashing in 2008 that has caused our misfortune.”

It’s also interesting to note that some of the websites that sell these statues also offer a complimentary home listing on their site, free with every purchase.

Other Myths and Legends

Take, for example, clients –or real estate agents who refuse to look at homes where someone has died. Or, what about prospective buyers who refuse to buy a home during certain astrological time periods? Then there’s the issue of numbers, with ‘13’ being a house or apartment number that many people will avoid. Some real estate agents will even try to avoid the number 13 popping up in an asking price, taking care to avoid listing prices of say, $113,000 or $213,000. Likewise, hotels and apartments will often skip the 13th floor altogether. Chinese buyers, on the other hand, are often leery of the number ‘4’, since this number is considered to be bad luck. On the other hand, ‘8’ is considered to be very lucky in Chinese culture.

Tips for Helping Your Home Sell Faster

Legends aside, though, there are a few things that every homeowner, or real estate agent, can do to help a home to sell faster. With this in mind, let’s have a look at a few proven ways to make a home more attractive to potential buyers.

Make Necessary Repairs and Upgrades-The first step towards ensuring that a home will sell faster, and for a more competitive price, is making all necessary repairs and upgrades. This means patching any holes in walls, replacing broken door knobs, and upgrading any worn out carpeting. This isn’t the time to do a complete remodel in the home, but making small yet important repairs and upgrades can have a significant difference when it comes to helping a home to sell more easily.

Clean, Clean, Clean-Next, you’ll want to ensure that the home is as clean as possible. This means clearing up anything that’s sitting around, and packing away many personal knickknacks –ensuring that countertops and other surfaces are clear and clean. In the same way, ensure that the outside is clean as well. Tidy up the yard, trim back bushes, clean the porch, and cut the grass.

Give It a Fresh Coat of Paint-Giving the walls a fresh coat of tasteful, neutral paint can help a home to feel lighter, cleaner, and more open. It will also help potential buyers to envision the rooms as their own.

Consider Staging-Staging a property is a vital, yet often-overlooked step in the sales process. This will help the home to look best in its photos, and also make it more appealing to prospective buyers who view the property in person. To stage your home, you can enlist the services of a professional home stager, or stage the home yourself. Important steps for staging include using smaller furniture to help the rooms feel bigger, removing all personal effects, and strategically placing art and accessories to add glamour and style to a room. You should also ensure that there’s adequate lighting, and make sure the fixtures are clean and up-to-date.

Pay Attention to the Kitchen-The kitchen is one of the most valuable rooms in a house. It is worth the most per square foot. Oftentimes, the kitchen can help to make or break a home buying decision. If your kitchen is in need of an upgrade, consider refacing your cabinetry, rather than replacing the entire cabinets themselves. Decluttering all of the surfaces, and placing a bowl of fruit or fresh flowers on the table can also help to add a fresh new look to your space.

Post Plenty of Pictures-According to a study by Trulia, listings with more than six pictures are twice as likely to be viewed by buyers, compared with listings with fewer than six pictures. Including plenty of pictures on your home listing is always a good idea –just make sure your photos look professional. Throw open the curtains to let in plenty of natural light, and make sure there’s no stray clutter or unmade beds in any of the photos.

Throw in Some Freebies-We all know about closing cost credits, but including some free items is another way to help to sweeten the deal, and differentiate your home from others on the market. Freebies like stainless steel kitchen appliances or a flat-screen TV are things that most potential buyers will appreciate.

Post Your Listing on Facebook-Facebook can help to facilitate connections, and it’s worth sharing your home on this social network as well. If you have 100-200 friends and your friends each have100-200, think of the potential to get the word out about your home.

Choose the Best Time to Sell-Before you list your home, think about the time of year that you’re selling. Your best chance of selling quickly is listing your property during a season when buyer demand is high. Spring is traditionally one of the best times to sell, and the market’s usually busy with potential buyers. Many families try to time their new home purchase with the end of the academic year at school, and the better weather will also help your home to look its best. Winter is often regarded as a difficult season to sell, if you’re planning a winter sale, you may want to consider putting your home on the market in the New Year, rather than during the holidays when people’s minds are on other things.

Price the Home Accurately-Finally, the most important factor when it comes to selling a home in a timely manner, is finding an accurate price point for it. The best way to set a realistic price for your home is by enlisting the services of local real estate agents. In some cases, an agent won’t even charge for a simple evaluation, and it may be worth checking with a few different agents to see which type of pricing they come up with. Remember: the highest valuations won’t necessarily equate with a quick sale. You can also check websites Zillow and Trulia for historical sold price data, to get an idea of what yours can sell for. Your goal is to find a price that will make your home appealing to buyers in the current housing market.

Finally, if you’re having trouble selling your home, and considering using a St. Joseph statue to sell your home, perhaps you’d be better served by seeking out a professional real estate agent. Real estate agents may not be patron saints, but they are experienced with selling homes and could be your secret to selling a lot faster.

In residential real estate, the Contract to Buy & Sell can be a bit confusing for first-timers, especially because it’s 19 pages long. The dates & deadlines of the real estate contract are covered even before the sales price. If you understand what those dates mean, you will understand 75% of the contract. There are 36 possible deadlines, but you usually don’t use all of them. You can find an example of the current deadline chart at the end of this blog.

Item No. 1 – Alternative Earnest Money Deadline

This is the date that your Earnest Money deposit must be turned in to either the Brokerage or Title Company. The next 7 dates are on the Title Policy.

Item No. 2 – Record Title Deadline

This is the deadline in which the Title Company must provide the Buyer, a current commitment for an owner’s title insurance policy. This will consist of copies of any plats, declarations, covenants, conditions & restrictions burdening the property. And copies of any other documents listed in the Schedule of Exceptions in the Title Commitment that was furnished to the Buyer.

Item No. 3 – Record Title Objection

The Buyer can object to the Record Title Deadline here. This can be based on any unsatisfactory title condition, in the Buyers sole discretion.

Item No. 4 – Off-Record Title Deadline

The Buyer must receive, on or before this deadline, true copies of all existing surveys in the Seller’s possession pertaining to the Property and must disclose to Buyer all easements, liens or other title matters not shown by public records, of which the Seller has actual knowledge.

Item No. 5 – Off-Record Title Objection

This is similar to the Record Title Objection. The Buyer can object & terminate if unsatisfied with documents provided in item No.4.

Item No. 6 – Title Resolution Deadline

This is the date on which all title objections must be resolved.

Item No. 7 – Right of First Refusal

This date applies to situations, where an outside entity, like an HOA, has to approve a Buyer’s contract. If the entity who holds this right, disapproves the contract, the contract terminates.

Item No. 8 – Association Documents Deadline

The Listing Agent typically handles this for the Seller. This is the deadline for which the Buyer must receive all current HOA documents. This is VERY important for Buyers to review, especially in Townhome or Condo Communities. This is where buyers can find pet, design, parking, and many other rules and restrictions.

Item No. 9 – Association Documents Objection Deadline

The Buyer has the right to terminate on or before this deadline, based on any unsatisfactory provisions in the HOA docs.

Item No. 10 – Sellers Property Disclosure Deadline

Sellers typically complete this document before listing their home for sale. This is the Sellers disclosure on any issues or improvements that they have any knowledge of pertaining to the home. There is no objection for this because it’s simply a disclosure. The Buyer will have their own inspections to get the current facts on the property.

Item No 11 – Loan Application Deadline

This is pretty self-explanatory. Buyers have usually gone through this process before submitting an offer. It’s the deadline in which the Buyer must submit a full loan application to the lender.

Item No. 12 – Loan Objection Deadline

This contract is conditional upon the Buyer determining, in Buyers sole discretion, whether the new loan is satisfactory. This includes payments, interest rate, terms, conditions, and cost. This deadline is for the sole benefit of the Buyer.

Item No. 13 – Buyers Credit Information Deadline

In the case of owner carry financing, this deadline applies to the Buyer supplying the Seller with financials, a credit report, etc…

Item No. 14 – Disapproval of Buyer’s Credit Information Deadline

This is the Seller’s opportunity to decline the Buyer based on the information provided.

Item No. 15 – Existing Loan Documents Deadline

This is only applicable for assumptions; by this deadline, the Seller must provide all current loan documents to the Buyer for review.

Item No. 16 – Existing Loan Documents Deadline

Once the Buyer receives the Seller’s current loan information, they have the right to review the terms and object or decline.

Item No. 17 – Loan Transfer Approval Deadline

This only applies to assumptions; this final deadline applies to the lender approving the assumption.

Item No. 18 – Seller of Private Financing Deadline

This deadline applies if any portion of the financing of the transaction is by private or seller financing. The Buyer must decide by this date if the financing being offered is acceptable.

Item No. 19 – Appraisal Deadline

This is the date in which the Buyer must receive an appraisal of the property. It’s probably best for the Buyer Agent to communicate with the lender as the deadline approaches because appraisers tend to be behind during the busy season. This does not apply to VA loans.

Item No. 20 – Appraisal Objection Deadline

Either the appraisal matches the price or it doesn’t. By this deadline, the Buyer must submit in writing that the valuation is less than the purchase price. At this point, a couple of things can occur: a) the Seller can come down in price to match the valuation; b) the Buyer can bring the difference in cash or c) the Contract can terminate.

Item No. 21 – Appraisal Resolution Deadline

If there is an appraisal objection, the issue must be resolved by this date or the contract terminates.

Item No. 22 – New ILC or New Survey Deadline

An Improvement Location Certificate or Survey is usually only ordered if the lender requires it, or if the Buyer has questions as to where the exact property lines are. The Buyer must receive either document by the deadline.

Item No. 23 – New ILC or New Survey Objection Deadline

The date when the Seller must receive a written description of any matter that is unsatisfactory and the Buyer requires the Seller to correct.

Item No 24 – New ILC or New Survey Resolution Deadline

If there is an ILC or Survey objection, the issue must be resolved by this date or the contract terminates.

Item No. 25 – Inspection Objection

The Buyer must have all home inspections completed by this date. Seller must receive a written description of any unsatisfactory physical condition that the Buyer requires the Seller to correct.

Item No. 26 – Inspection Resolution Deadline

If an objection is received by the Buyer, the Seller has until this date to respond in writing, addressing the Buyers repair requests. The Buyer has to agree to the terms or the contract terminates.

Item No. 27 – Property Insurance Objection Deadline

Prior to this date, the Buyer must obtain as many bids as they’d like for home owner’s insurance. If the insurance does not meet their satisfaction, they must terminate in writing by this deadline.

Item No. 28 – Due Diligence Documents Delivery Deadline

If the box is checked, the Seller agrees to deliver copies of the requested documents pertaining to the property. This can include any leases, completed contract work, warranties, permits, etc.

Item No. 29 – Due Diligence Documents Objection Deadline

If the Due Diligence Documents are not supplied to the Buyer or are unsatisfactory, the Buyer can terminate or Object. If the Buyer Objects, they must deliver a written description of unsatisfactory documents that they require the Seller to correct.

Item No. 30 – Due Diligence Documents Resolution Deadline

If there is a Due Diligence Document Objection, the issues must be resolved by this date.

Item No. 31 – Conditional Sale Deadline

If the Buyer has a property to sell before they can complete the purchase, list that property here. If it is not sold and closed by this date the Buyer may terminate.

Item No. 32 – Closing Date

This is when the Seller delivers the deed to the Buyer. The Closing date is specified here or by mutual agreement. The hour and place will usually be designated by all parties.

Item No. 33 and No. 34 – Possession Date and Time

This is when the Buyer gets keys and the Seller is no longer allowed to enter the property at their own discretion. This usually occurs at closing.

Item No. 35 and No. 36 – Acceptance Deadline Date and Time

This is the day and time in which the Buyer requires the Seller to respond to their offer. If the Seller is countering, a new deadline is established on the Counterproposal.

Real Estate Contract Dates & Deadlines Summary Chart

As a Realtor people often ask me how market value is determined. Sellers want to know their market value so they can decide on a fair asking price. Buyers want to know the market value of their home so they can see that the price of the home is justified. Here is the advice that I usually I give them.

Factors that Influence Market Value

Back in school, they taught us that market value is “what a willing buyer will pay and a willing seller will accept”. That’s definitely true. Here are some factors that influence market value.

1. Inventory – In a competitive market like we’re in now, there aren’t as many homes for sale. Supply is low and demand is high, creating bidding wars. A willing buyer will pay more for a property now than they would have a few years ago. Many people are desperate to secure the sale and they are willing to pay a higher price to beat out the competition. Market value is redefined each time buyers write an offer.

2. Home Sales – Recent home sales in the area also influence market value. You may have heard the term “comparable properties”. The definition of comparable properties is homes nearby which are similar in size, age and condition to the subject property. These comparable homes will definitely be used to establish a home’s market value. Buyers will look to see what homes have been selling for lately and will often base their offers on such. And appraisers will use these comparable sales to justify the current contract price.

Factors that Do NOT Influence Market Value

1. What a seller originally paid for the property does not determine it’s current market value. It doesn’t matter if they got a screaming deal on it just two years ago. It doesn’t matter if they paid a crazy low price when they bought the home. They could have paid five dollars for the property. You are not going to benefit from the great deal they once got.

2. What your relatives in another state think the price “should be” doesn’t determine market value. If your parents live in Texas, chances are they paid less for their 4,000 square foot, all brick rancher on 2 acres of land than you’re going to pay for that 1,700 square foot 2-story home in Colorado Springs. Conversely, your sister in California paid more for her $925,000 townhome in Santa Barbara than you will pay for a spacious single family home in Colorado. An accurate estimate of market value needs to compare apples to apples, and we all know that home prices can really vary across different regions.

3. The public assessor’s site property valuation is not actual market value. I don’t know why, but the assessor’s estimate is always under market value. And really, that’s a good thing. Our property taxes are calculated on this, and if the county assessor thinks a home is worth less, then our property taxes are lower. Hooray!

4. Public internet sites are not always accurate with their valuations. For example, Zillow posts home values on their site and call these valuations “Zestimates”. I constantly tell buyers and sellers not to believe the Zillow Zestimate they have seen. They are always low. To prove my point, NBC News recently reported a class action lawsuit was filed against Zillow for undervaluing properties. It turns out they are obtaining these valuations from the county assessors site. Interesting!

Realtors, the Best Resource for Market Value

Anyone can give you an idea of what they think your home will sell for, but they won’t always be right, and it won’t always be supported by data and facts. The only way to get an accurate determination of the market value of your home is to call a professional. Realtors live and breathe the housing market, and giving homeowners a market value on their home is a regular part of our job. When I meet with a homeowner to do a market value analysis, I will not only give you a value based on data and my many years of experience, but I will tell you how I arrived at the market value and all of the factors that were considered.

Selling your home can be stressful at times. The sign is in the yard, the lockbox is on the door & your house is finally active in the MLS & third-party sites. Now, you’re eagerly waiting to hear what potential buyers thought of your property. Feedback is imperative for sellers, especially for those whose homes might be taking a little longer to sell than anticipated. Here is my best advice when you start getting feedback from showings.

First & foremost, don’t take comments too personally. If somebody says that your home smells bad, you can fix the problem ASAP, so that other potential buyers don’t have the same issue.

Focus on the things that are changeable. Paint, lighting, temperature, decor, and staging are all pretty easy fixes. There is no sense to fret over the comments about the busy street, lack of 3 car garage or placement of power lines.

Feedback helps both the Realtor and the Seller. If I get a comment stating that the buyers didn’t like the paint color in the kid’s bedroom, I can call my seller to see if they’d be willing to fix that problem.

If a showing agent has trouble with the key & had a hard time accessing the property, we want to know. Same goes for odors, décor, how the home showed, etc.

If 10 potential Buyers go through a property with similar feedback, then it’s probably time to address and fix the problem, if you can.

At times, you’ll get Buyers who forget or ignore your feedback requests, that’s why you have us to chase them down!

Many people selling their homes in Colorado Springs are surprised to learn that the number of days the property has been on the market can affect its ultimate selling price. The ratio is generally an inverse one: the longer your home remains on the market, the lower the price. Conversely, homes on the market for short periods of time tend to command higher prices. So, the moral is, work with a Colorado Springs real estate agent who will help you price your home correctly for the current market AND maximize your net profit.

We have found that the highest net profit for the seller is achieved during the first 30 days on the market in Colorado Springs. (As a point of reference, DOM, or Days on Market) is the time your property is actively listed on the market up until an offer is accepted. The median DOM indicates the actual central number of days that all homes for sale in the Springs are on the market before accepting an offer. The average DOM may be inaccurate due to a plethora of overpriced homes and builders who sometimes list properties on the MLS before construction is complete.

Homes that have been on the market for long periods of time raise questions in the minds of potential buyers including:

Why hasn’t it sold?

Is there something wrong with the house?

How low do you think the sellers will go?

None of these are conducive to selling your Colorado Springs home expediently and for the best possible net profit.

When your home is priced correctly early in the game, potential buyers, who have looked at many homes online and in person, will recognize it as an excellent value and will be more likely to submit an offer close to your asking price. If you price the home well above its market value, there are a number of possible consequences including

Receiving a number of “lowball” offers, with buyers knowing that the property is overpriced

Not receiving any offers at all

Having the property listed for more than 30 days

Needing to eventually drop the price in order to sell the home, often to the market price that would have resulted in a much earlier sale

If, after a substantial time on the market with no results, you decide to take your home off the market to reset the DOM, you must keep it unlisted for 30 days before re-listing it. However, savvy real estate agents may check a property’s history in the MLS and will see that it was previously listed before you put it back on the market. For these agents’ clients, the property will still seem like “damaged goods.”

Your best bet is to work with a trustworthy Colorado Springs real estate agent who constantly tracks the median sale prices in your neighborhood and will help guide you to a stress-free and profitable sale.

There are several statics, rates and numbers you can look at when trying to determine the health of a specific Real Estate Market but when we price a home for sale we only consider a few. The primary statistic we want to know about as we prepare to put a home on the market is “Months Supply of Inventory” (MSI). This number indicates how long it would take to sell through all of the existing inventory. Since we are trying to price a specific property, we look at MSI as it pertains to a specific area and price niche not the entire market. MSI for the overall market is more useful when answering a question like “How’s the Real Estate Market”, not so helpful when trying to answer the questions “How much can you sell my house for”?

So, for the purpose of listing a home for sale, we want to drill into a specific area, price range and type of home. For the sake of this article let’s say we are selling a:

4 bedroom

3 bath

3 car garage

2,800 square foot

Two-Story home

Located in the Academy, District #20 attendance area.

The first step to establishing the Months Supply of Inventory is to find the “Absorption Rate”. This is the number of homes that sell in a particular market segment over a specified amount of time (we use one year).

To establish absorption rate, we look at the total number of similar homes that have sold over the past year. Let’s say there have been 225 sales of this particular type of home over the past year.

This means 18.75 homes like this, sell on average each month (225 sales/12 months). If there are currently 42 homes like this for sale on the market, we have a 2.3 Month inventory of that kind of home. We determine this by dividing the number of available homes by the number that sell per month. It is important to note that Absorption Rate is often expressed as a true percentage, especially in the Commercial Real Estate world but for the purpose of establishing MSI, our method is sufficient. For the purists the actual absorption would be 5.33% of the inventory.

The MSI in our example ends up being 2.3 Months of inventory. This is a very low amount of inventory and constitutes a “Sellers Market”. Common acceptance of a Seller’s market is anything less than 5 Months of inventory is considered to be a Sellers Market.

An MSI of less than 5 months = Seller’s MarketAn

MSI of 5 to 7 months = Balanced Market

An MSI of more than 7 months = Buyer’s Market

An MSI of 2.3 months would certainly encourage us to move higher on our listing price, although there are still a handful of other factors we look at, like: “Days on Market”, “List to Sold Percentage” as well as trends in the appraisal industry.

Months Supply of Inventory is an essential indicator to know and understand whether buying or selling.

The first question on the minds of most people getting ready to sell their home is, how much is my home really worth?

Can We Believe Zillow?

Homeowners thinking about selling have usually gotten an estimate from a home valuation site like Zillow or even asked a Realtor what they thought the value might be. It is important to keep in mind that those numbers should only be used as a rough estimate. Zillow freely admits that their zestimates are on average 8% +/- correct. On a median-priced home in El Paso County, Colorado that is about a $20,000 delta +/-, pretty significant, in our opinion. The Zestimate was never meant to be the be the final word, just a rough idea of what the home is worth.

Where to Start Pricing

When a homeowner becomes serious about selling, they have a couple of options when it comes to getting the price right. First, they can order a Professional Appraisal, this is a great way to find out the “baseline value” of the property. Appraisers don’t take into account market trends or supply conditions, so their price is a true value but not necessarily a market value. Depending on the current market conditions (Buyers Market vs. Seller’s Market) the actual listing price could be quite different.

The second method and the one we use when putting a home on the market is called a CMA (Comparative Market Analysis), this is a document that helps us determine the baseline value as well as the best actual listing price of a home.

Ideally, a professional CMA examines the sales data and characteristics of the most similar homes, located within the closest proximity to the “Subject Property” (the home we are trying to price). Essentially we look for identical matches to the subject property, we call these matches “Comparables” (Comps) since this is not really possible to find “Exact Matches”, we filter through these comps in order to find the closest matches possible.

The “Comps” are then put into a spreadsheet alongside the “Subject” property so we can start to apply debits and credits to the “Subject” property in order to compensate for any differences. These adjustments are based on things like:

Location

Square Footage

Floorplan

Number of Bedrooms

Number of Bathrooms

Garage Size

Lot Size

Upgrades

These adjustments show us where the “Subject” property should sell when compared to the Comparable Solds. This figure now becomes our baseline or the number we start from when choosing a listing price.

There are a number of additional factors we consider before deciding on an actual list price, we will examine these in future articles. Until we have a realistic number to work with or a baseline value, any additional considerations are actually counterproductive.

The first step in any Residential Real Estate sale is setting a baseline value to work from.